Module Ten

Evaluating the Performance

of Salespeople
 Purposes of Salesperson
Performance Evaluations
• Ensure that compensation is consistent with actual
salesperson performance
• Identify salespeople that might be promoted
• Identify salespeople who should be terminated and to supply
documentation
• Determine training and counseling needs
• Human resource planning
• Identify criteria for recruiting
and selecting salespeople
 Purposes of Salesperson
Performance Evaluations
• Advise salespeople of work expectations
• Motivate salespeople
• Help salespeople set career goals
• Relate salesperson performance to sales
organization goals
• Enhance communications between
salesperson and sales manager
• Improve salesperson performance
 Salesperson Performance
Evaluation Approaches
General conclusions:
• Annual basis
• Combine input and output criteria
• Use quantitative and qualitative measures
• Performance standards and quotas are set in
collaboration with salespeople
• Assign weights to different objectives
• Incorporate territory data
 Salesperson Performance
Evaluation Approaches
General conclusions (continued):
• Multiple sources of information
• Conducted by the field sales manager who
supervises the salesperson
• Provide a written copy of the review and
conduct a personal discussion
 360-Degree Feedback System
• Evaluated by multiple
raters Sales
Manager
• Salesperson’s value to

Evaluation
Evaluation
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 Perspectives on Salesperson
Performance Evaluation
Outcome-Based Behavior-Based
• Little monitoring of • Considerable
people monitoring of
salespeople
• Little managerial
• High levels of
direction of managerial direction
salespeople of salespeople
• Straightforward • Subjective measures
objectives measures of salesperson
of results characteristics,
activities, and
strategies
 Dimensions of Salesperson
Performance Evaluation

Behavioral
Behavioral Results
Results

Salesperson
Salesperson
Performance
Performance

Professional
Professional Profitability
Profitability
Development
Development
 Criteria for Performance Evaluation
Behavior:
• Activities performed
• Activities to promote long-term customer
satisfaction
• Sales calls
• Customer complaints
• Required reports submitted
• Training meetings
• Letters and calls to prospects
 Criteria for Performance Evaluation
Professional Development:
• Assess improvements in certain
characteristics: traits, skills, knowledge
• Attitude
• Product knowledge
• Initiative and assertiveness
• Communication skills
• Ethical behavior
 Criteria for Performance Evaluation
Results:
• Measured objectively: sales, market share
• Possible negative effects
• Sales quotas
 Elements Important in
Assigning Sales Quotas
• Concentration of businesses
• Geographic size of the territory
• Growth of businesses within the territory
• Commitment by the sales manager to assist
• Complexity of products sold
• Past sales performance
• Extent of product line
• Financial support
• Amount of clerical support
Criteria for Performance Evaluation
Profitability:
• Specific products sold
• Prices negotiated
• Expenses incurred
• Criteria
 Performance Evaluation Methods:
Characteristics any method should include

• Job Relatedness
• Reliability
• Validity
• Standardization
• Practicality
• Comparability
• Discriminability
• Usefulness
 Performance Evaluation Methods
Graphic Rating/Checklist Methods
• Performance evaluation form
• Especially useful in evaluating behavioral and
professional development criteria
• Good on most characteristics, especially job
relatedness, standardization, practicality, and
comparability
• Disadvantage is providing evaluations that
discriminate sufficiently
 Performance Evaluation Methods:
Ranking Methods

• Rank all salespeople according to relative

performance on each performance criterion
• These methods force discrimination as to the
performance of individual salespeople
• May be complex
• Rankings only reveal relative performance
evaluation
 Performance Evaluation Methods:
Objective-Setting Methods
Management By Objectives (MBO)
• Mutual setting of well-defined and measurable
goals within a specified time period.
• Managing activities within the specified time
period toward the accomplishment of the stated
objectives.
• Appraisal of performance against objectives.
 Performance Evaluation Methods
Behaviorally Anchored Rating Scales (BARS)

• Links behaviors to specific results

• Salespeople are used to develop performance
results and critical behaviors
• Positive feedback about behaviors may be
more effective than positive output feedback
 BARS Scale: Cooperative Relations with Other Sales Team Members Behavioral
Anchor Statements Could be expected…
…to cooperate when aid is requested by other team members.
…to go out of her/his way to help the team achieve its goals.
10
…to lend a helping hand and can be expected to try hard to help the team.
9 …to occasionally support the team on problems encountered in the field
8
…to contribute half-heartedly to the team effort to accomplish goals
7
…not to care much about the team and its members
6
…to antagonize members of the team and pull against the team goals
5
4
3
2
1
0
 Performance Evaluation Bias
• Occurs when a manager’s evaluation of a
salesperson is affected by considerations
other than the specified criteria
• Common sources of bias:
• Personal relationships
• Perceived difficulty of territory
• Impression management
• Halo effect
• Outcomes bias
 Framework for Using
Performance Information
Evaluate Salespeople against Relevant
Performance Criteria

Identify Problems

Isolate Causes

Determine Solutions
 Salesperson Job Satisfaction
• Job satisfaction related to turnover, absenteeism,
motivation, and organizational commitment
• Job satisfaction may be related to performance
(direction of relationship is unknown)
 Salesperson Job Satisfaction
• INDSALES measures satisfaction with:
• Job
• Fellow workers
• Supervision
• Company policy and support
• Pay
• Promotion and advancement
• Customers
• Results may identify areas where manager may
intervene to improve job satisfaction